When you retire, you must get a final pension statement that tells you the value of your pension. Bond rates change every day, so it’s important to get this final statement with an actual final value amount (the commuted value) so you can start to plan with your Certified Financial Planner what you’ll do next with that amount of money. You can also take that final pension statement and shop around for a Copycat Annuity from a Canadian financial institution, which may also lead to a cash surplus (extra bonus cash paid to you on top of your pension). Check your plan wording to know your options. Many plans limit the commuted value option depending on retirement age.
If you are going to get a lump-sum payment, the statement must give you information that will help you decide whether to take the lump-sum payment or to take a monthly income from the plan.
What Are Final Pension Statements?
Final Pension Statements (also called final transfer statements and final pay statements) contain detailed information about your plan.
If you take the lump-sum payment option or if you transfer your pension to another plan, it’s important to get this statement so that you receive all the benefits you are entitled to.
Final pension statements usually show:
- Your years of service in the plan
- The salary used to calculate your entitlements under the plan
- A total dollar value for all benefits earned in the plan up to the date indicated in the statement.
- A total dollar amount of the commuted value.
- The commuted value of your pension, likely some paid as locked in money plus some taxable cash.
How To Obtain A Final Pension Statement
You can request this statement from your employer by asking for a Final Pension Statement. If you no longer work for them, ask for an Employee Benefit Enquiry form. You may also want to ask for other benefit information such as:
- An explanation about any money left in the plan after you leave.
- Details on how the money in the plan was invested and what returns it earned.
- Information on the fees that were deducted from your account during your membership with this plan.
You may request a Final Pension Statement and other benefit information at any time. However, if you leave or retire, it is best to ask for these documents ASAP so that you receive them before you retire and have the ability to potentially transfer your pension funds away from your employer and over to a trusted financial institution.
Ask about how long it will take to get them as soon as possible before such funds are transferred out of the pension fund. You can also hire a Certified Financial Planner to help you navigate through this process and find out what’s next for your money after retirement, which could include a Copycat Annuity, transfer to a new employer or the commuted value.
If you would like to learn about how your pension funds could be used after retirement, click here to schedule a free 15-minute consultation with one of our Certified Financial Planners.
